Bell Microproducts has had to fork out just shy of $70m in legal and consultancy fees as the costs were racked up over the past months for it to provide the necessary paperwork to restate its results for 2004, 2005 and file its annual report on form 10-K for 2006.
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The distributor was forced to go through the process of restating its figures for the Securities and Exchange Commission (SEC) and now the way is clear for the distributor to go for a relisting on Nasdaq, which it came off as a result of the SEC restatement process last year.
"This is a major step to becoming current with our SEC reporting obligations," said Don Bell president and CEO of Bell Microproducts in a statement.
In its filing for the SEC Bell Microproducts revealed that it had adjusted the reasons for some of its charges and as a result of re-classification of some acquisition related payments it had lowered pre-tax income reported for the years 2004 and 2005.
Revenues for the full year 2006 were $3.37bn billion, an increase of 7% over 2005 revenues. But with the impact of a tax provision in the fourth quarter, the distributor recorded a 2006 net loss of $23.1m.
The charges that Bell Microproducts has picked up during the restatement process are expected to decrease this year as the bulk of the work has been completed.
But some industry watchers are concerned about the impact on the balance sheet of the restatement of accounts pointing out that losing having to pay out charges in the current economic environment weakens the distributor and potentially makes it a more likely acquisition target.